Crisis of fictitious digital capital? Berlin Biennale review

In the current Berlin Biennale there is a section inside a business school in a former GDR government building, because that’s what this Biennale is about, putting art and cyberspace and the economy and the city’s history in touch. In this section of the show the artist Simon Denny has put fair booths of cryptocurrencies, as a reflection on the aesthetics of these new financial systems, comparing them to printed money or stamps. Last year at the Venice biennale he had investigated surveillance organisations and extrapolated their aesthetics. This time an art show in the form of a trade fair, as a reflection of current economic phantasies. One of the systems exhibited as the anarchic, grassroots type, called “Ethereum”, has a particular system of smart contracts attached to it that resembled a digital venture fund, the DAO.

The DAO was pushed last month in a quick crowdfunding (apparently the largest crowdfunding campaign in history) which had a feel to it of a pyramid sheme or a super fast version of how bitcoin developed. That way it might have resembled an attractive business opportunity to those that were sad they had missed out on the initial hype of cryptocurrency with Bitcoins. But as it turns out, the so-called “smart contract” of the DAO was not so smart, and an imaginative banker/hacker created a profit with fictituous cyber capital by looping a splitting function in the code. This resulted in a crisis, breaking the system that now cannot be fixed without risking the ideology of free uncontrolled market interaction that it stood for.

While the Berlin Biennale still shows money as an image, economy as a fiction, this new economic phantasy experiences its first financial crisis and appears in its most clear and striking image: the bubble bursts and leaves a firework of digital coins.